Technical assistance unlocked €300 million in public investment, helping Morocco through the COVID-19 crisis

In August 2020, Morocco was fighting its first coronavirus wave, and hospitals were overflowing. To help the country pay for urgently needed medical supplies, equipment and staff training, the European Investment Bank approved a €200 million loan package and swiftly disbursed the first tranche of €100 million.

Getting the money, however, was only part of the battle.

Morocco needed to spend the funds quickly and wisely to mobilise resources for the unprecedented health emergency. Officials also had to coordinate with local hospitals, clinics and suppliers, domestic and international, to make sure supplies and equipment got where they were needed most. It was no easy job.  

Technical assistance, mobilised under the Economic Resilience Initiative, was put in place, and played a critical role in disbursing the second tranche of €100 million in November 2021. That technical assistance enabled Morocco to utilise the money quickly. Specifically, consultants helped manage the investments by: 

  • ensuring local and regional respected public procurement guidelines;
  • putting in place processes to effectively track and distribute the money; and
  • meeting environmental and social standards that accompany any European Investment Bank financing.

“Under the Bank’s supervision, the Resilience Initiative team had two priority objectives,” says Mohamed Miftah, who now leads a team of five consultants under the Economic Resilience Initiative. “First, to act as a relay on the ground to improve coordination between different investment projects. Second, to focus on lifting blockages on priority projects in health, energy and transport sectors that represent the largest part of the Bank’s portfolio in Morocco.”

Project hurdles

The European Investment Bank began investing in Morocco in 1979. Since then, it has committed €9.6 billion – including €2.5 billion since 2017. Getting projects up and running, however, is challenging. Projects that are complex or cover several geographical areas require more preparation and detailed design. The procurement process can also be lengthy and hampered by unsuccessful tenders.

Along with offering technical assistance to unblock funds, the Bank also conducts a yearly portfolio review and regular workshops with the offices and agencies implementing projects.

“Morocco is the second recipient of European Investment Bank funds outside the European Union, after Egypt,” says Catherine Barberis, head of the European Investment Bank unit responsible for managing and monitoring projects in neighbouring countries. “Together, these elements are crucial to allow smooth implementation of our projects on the ground.”

The pandemic exacerbated challenges linked to procurement and environmental and social standards, delaying projects and creating a backlog of undisbursed loans. In 2020, an analysis of the Bank’s project portfolio in Morocco showed the need to accelerate disbursements by providing additional support to clients.

Unlocking investment

Various issues were holding up projects. For example, the extension of a tramway connecting the cities of Rabat and Salé required resettling inhabitants along the planned line. A gap existed between Moroccan and European Investment Bank standards.

Part of the issue was fair compensation and improvements to the living conditions of people affected by the project. The European Investment Bank ensured the process complied with the Bank’s guidelines, by enforcing plans to resettle people and restore their livelihoods.

In the energy sector, disbursements for several large-scale renewable energy projects (wind and solar) were particularly complex because of the Bank’s strict standards surrounding public consultations, which require the promoter to disclose full and clear information to people affected by the project in a timely manner, and to then hold meaningful public consultations.

The consultants also helped Moroccan agencies with reporting. In the Zenata urban development project, for example, technical assistance was provided to support the preparation of a progress report which was necessary to fulfil disbursement conditions.

“Disbursements reflect the impact of the Bank’s investments, and we look for the best solutions to accelerate them,” says Audrey Givone, a loan officer in the energy sector and country lead at the European Investment Bank. “Our experts based in Rabat were asked to work on projects under disbursement that corresponded to their sector of expertise in Morocco, building on their experience and networks in major public sector entities. This local expertise unlocked the bottlenecks that we faced.”

The results are clear. In 2022 alone, total disbursements doubled to reach €381 million.

Workshops to solve problems

In March 2020, before COVID-19 lockdowns, the Bank organised workshops for promoters, public officials, clients and beneficiaries as part of a comprehensive review of its public sector portfolio in Morocco. More than 90 participants attended a workshop covering the Bank’s rules on procurement and environmental and social standards. Other workshops have taken place since then.

"As a nonprofit European institution, the EIB provides optimal financial conditions, yet its specific organisational structure presents a unique set of advantages and challenges,” said Amar Kaddouri, head of the Europe division in the budget department of the Ministry of Economy and Finance. "These workshops are advantageous as they provide opportunities to raise questions.

For example, it is not enough for promoters to follow national procurement guidelines. Those guidelines must also comply with EIB rules.  National guidelines sometimes give preference to local suppliers or service providers. But the Bank requires universal eligibility and equal opportunity, and local providers can be as much as 15% more expensive than international providers.

“Procurement is at the heart of all our investment projects. Therefore, if the EIB guidelines are not followed — even if the national procurement guidelines usually are — this can block delivery,” says Alaleh Motamedi, the Bank’s deputy head of procurement, who led a workshop in June 2022.

A more recent workshop in mid-June covered legal issues surrounding contracts and climate considerations that fall under the EIB Group Climate Bank Roadmap and a new source of funding, the City Climate Finance Gap Fund..

Asmaa Sghiouar, head of finance at the National Office of Electricity and Drinking Water (ONEE), which has benefitted from steady EIB support over the years, said that consultants from the Economic Resilience Initiative helped her team navigate thorny issues surrounding loan disbursements and the project cycle. “These workshops help brainstorm more solutions,” she says, “and we appreciate EIB's initiative in facilitating this."

>@EIB